Do you book profit or book loss? You have bought the shares of ABC Ltd at a rate of Rs.100 per share. The current market price is Rs.150 per share. Also you have bought the shares of XYZ Ltd at a rate of Rs.200 and the current market price is Rs.125. Do you book profits by selling ABC or book losses by selling XYZ. Warren Buffett said, “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” This quote from Warren Buffet is the essence of selling loss making investments as a part of wealth management. However to the contrary most of us tend to sell those investments that makes us money and prefers to hold on to those that is already making losses. It is just probably a feeling that we could not have gone wrong and the investment would revive, or on the other hand a feeling that we have been fooled and do not want to be fooled again and do not want to take action. What to do with loss making investments? It's not whether you're right or wrong that...
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